The good news is that Iraq's fractious politicians may be finally moving to break the deadlock over the formation of a new government eight weeks after the March 7 election. The bad news is that despite the strong showing of the Sunni-backed alliance of former Prime Minister Ayad Allawi in the polls, the next government is likely to once again be dominated by Shi'ite parties — running the risk of recreating the political conditions that pushed the country to the brink of civil war following the 2005 election.Iraq's two largest Shi'ite-led electoral blocs — the State of Law coalition led by Prime Minister Nouri al-Maliki and the Iraqi National Alliance of Shi'ite Islamist parties, in which the radical cleric Moqtada al-Sadr is the dominant voice — announced Tuesday night that they would join forces, creating a combined coalition just a few seats short of a parliamentary majority. Although Allawi's list had narrowly edged out Maliki's by a margin of 91 seats to 89, the INA won 70 seats, making its combined total with State of Law 159 seats — just four short of the 163 needed for majority. Even if the recount currently underway at Maliki's behest affirms those results, the outcome looks set to once again be a shut-out of the Sunnis from a substantial share of power in Baghdad. That's if the Shi'ite alliance remains intact.The pact between Maliki's bloc and the Shi'ite Islamists could yet fall apart on the question of who would be the next prime minister. The parties have not yet agreed on a nominee, and while Maliki has made no secret of his desire to remain in office, the Sadrists have been dead-set against giving the incumbent another term ever since Maliki ordered government troops to move against Sadr's Mahdi Army militia in Basra in 2008. The Sadrists recently conducted a ballot among their supporters on the issue, which returned former Prime Minister Ibrahm al-Jaafari as the top choice.But if the Shi'ites can resolve their differences in the interests of holding on to power, they're unlikely to find it difficult to secure the remaining seats they'll need for a governing majority. In all likelihood, the Kurdish coalition, which won 43 seats, will not want to be left out of the government, and will barter its support in exchange for more attention to its claims on disputed territory in northern Iraq, first and foremost the oil-rich city of Kirkuk.Another Shi'ite-Kurd coalition government would be a bitter pill for Iraq's Sunnis to swallow, particularly since Allawi's Iraqiya list, for which most Sunnis voted, initially emerged with more votes than any other bloc. Even before the vote, the Sunnis had felt victimized by illegitimate political maneuvering to deny them a voice, particularly when a de-Ba'athification commission run by senior figures on the INA list banned some 500 mostly Sunni candidates from running for office on the basis of alleged Ba'athist ties, without ever revealing evidence against them. The de-Ba'athifaction committee has continued banning politicians since the election, while judges sympathetic to Maliki have, at his party's request, ordered a recount of votes in areas where State of Law lost to Iraqiya. The recount started this week despite the fact that international observers have said Iraq's election was largely free and fair and that a recount could be more easily tampered with then the original vote."We are slowly noticing that the sectarian atmosphere is returning in the city, and this is before a government has even formed," says former MP Azhar Al-Samarraee a Sunni from Baghdad. "This means there is a legitimate worry that the violence will return if the two alliances unite."A government formed without significant Sunni participation would also be a major blow to U.S. hopes of leaving behind a stable and peaceful Iraq as U.S. troops undertake a withdrawal that is scheduled to have U.S. combat forces out of the country by August, and the remaining troops gone by the end of next year. The return of Sunnis to the political process that most had boycotted during the 2005 election — which resulted in a government with minimal Sunni participation, and stoked the fires of the Sunni insurgency — was one of the major factors that brought Iraq back from the brink of collapse in 2007.But the Sunni tribes that had turned against al-Qaeda insurgents and made a major contribution to the success of the U.S. troop surge, have grown increasingly suspicious of Maliki's Shi'ite-led government. Since the U.S. began to draw down and cede security control to Iraqi forces, the tribal leaders who fought al-Qaeda as part of the "Sunni Awakening" have complained that the government has reneged on promises to include them in the police and armed forces. Their suspicion could turn to hostility if the Sadrist movement, which they accuse of backing some of the worst anti-Sunni death squads, takes a prominent role in the next government. Sadrists have expressed an interest in controlling a security-related ministry — perhaps Defense or Interior — which would sound alarm bells in Sunni communities. During the lawless days of Iraq's sectarian civil war, the Sadrist-controlled Ministry of Health allowed anti-Sunni deaths squads to roam hospital halls, according to Sunnis. Ominously, Sadr officials have also said that the once-disbanded Mahdi Army is reforming, ostensibly to ensure that U.S. troops abide by their pledge to leave Iraq by the end of 2011.With reporting from Wael al Hafeth in Baghdad